The further to the left or the right you move, the more your lens on life distorts.

Tuesday, August 04, 2015

Never

In the early days of the late communist dictator, Hugo Chavez, both his ideology and his confrontational style made him the darling of the American Left. Venezuela was to be yet another example of the success of the socialist/communist model—a model that demonizes private enterprise, confronts the United States, and makes Venezuela the people's utopia. Seizing the means of production from private enterprise and placing it under the control of government elites sounds like a great idea, until it's not.

In reality, it never works, and in this case, has driven a once-thriving South American country to the edge of chaos.

Every six months or so I revisit Venezuela, as much as a reminder of how a failed socialist model is tried over and over again with the same disastrous results. Disastrous, mind you, not for the elites, who benefit regardless, but for the common people who suffer greatly, even though they enthusiastically supported the Chavez' and Maduro's (the current 'president') utopian rhetoric and grand promises.

Venezuela should have been rich what with being the “12th largest oil producer in the world … and a beneficiary of the most sustained oil price boom in history”. Instead it is flat broke. It’s currency, the Bolivar is worth 1% of its official rate on the black market and 1/1000th of what it was before Hugo Chavez assumed power. According to the International Crisis Group:

The country may be on the verge of hyperinflation. Most economists reckon that the inflation rate is already 120% a year (the central bank stopped publishing price data, so no one is sure). Some expect it to reach 200% by the end of 2015.

The Bolivar has essentially stopped working as legal tender and now everything is doled out by the state in an effort to make things “affordable”. “The government uses a labyrinthine system of price and exchange controls to shield Venezuelans from soaring prices. But these make matters worse. Price ceilings have devastated local production; factories are operating at half-capacity and more than two-thirds of food is imported. Affordable goods are in short supply.”

The result has been food riots. Desperate gangs of looters are roaming the streets, forcing the remaining businesses to shut down. “One person was killed and dozens were detained following looting of supermarkets in Venezuela’s southeastern city of Ciudad Guayana on Friday morning, according to Venezuelan authorities. Shoppers seeking scarce consumer staples including milk, rice and flour broke into a supermarket warehouse on Friday morning, leading businesses in the area to shut their doors.”

This has prompted the government to seize the remaining food stocks in the country and parcel out the contents to the population. What else is it going to do? It has already printed all the money it can crank out so it is essentially looting whatever is left. CNBC says “Venezuelan troops occupied a Caracas warehouse complex used by local food giant Empresas Polar and Nestle to distribute food and beverages …. Workers said dozens of national guard and police took over the building on Wednesday evening. National Guard troops remained within the complex.”

Asked to explain the situation, the Venezuelan government has pointed the finger at the United States. “President Nicolas Maduro said the violence was premeditated and blamed the United States as being behind it.” Conspicuously absent from the list of those responsible are Hugo Chavez and his socialist “Bolivarian” policies.

This is the classic response from the Left. It's never the leftist politicians and their true believers who have sewn chaos and ruined lives. It's never the fact that their class warfare rhetoric and empty 'promises' are based on lies. It's never that the socialist model that has failed. Nah. Never!

About Me

Over the years, I’ve been an engineer, a manager, a professor, a consultant, an author and an entrapreneur. Today, I work with my sons at Evannex, an automotive aftermarket products manufacturer and e-commece company that specializes in electric vehicles. I've written a number of best-selling college textbooks and have tried the occasional novel.
I’ve lived long enough to see the irrationality in extreme positions taken by both ends of the political spectrum and worry that decisions driven by these positions may get us all into very real trouble. I harbor no illusions about influencing decision-making, only making a comment or two that might provoke you to think beyond the prevailing narrative.
On a personal level, I’ve been married for 48 years (to the same person!) and have two terrific sons who live and work in South Florida and are partners in a business we've created.
I'm originally from Connecticut, but have lived in SoFla for almost 20 years.